Entrepreneurship plays an important and influential role in the economic and standard living growth of a country. Entrepreneurs and start Ups helps in wealth creation and sharing by mobilizing the public wealth as distribution is one of the basic imperatives and goals of the economic development. They provide employment which ultimately boosts up the economy. When these initiates are set up in less developed and backward areas, it leads to infrastructure improvement in those areas and increase in the standard of living of people in a community by job creation and innovation. When these initiatives are expanded for business in foreign markets, they lead to business revenue which may help during economic downturns in local economy. So the entrepreneurs have a major role to spark economic development and contribute the various key goals such as GDP, exports, Skill development and community development. It is important for any country to nurture a healthy economic environment to encourage young entrepreneurs and Start Ups. In India, the LPG reforms of 1991 led to removal of various constraints such as licenses, government contacts and an understanding of bureaucratic system.
“Innovation is life. Where there is no Innovation, there is stagnation” stated the Prime minister in August 2017 while interacting with Start Ups and Young Entrepreneurs. It was for the initiative of NITI Aayog called ‘Champions of Change”. By this initiative the government has expressed its intention to work together with the young entrepreneurs. The shortlisted individuals were divided into six groups based on 6 themes — New India 2022, Digital India, Emerging a Sustainable Tomorrow, Health and Nutrition, Education and Skill Development, and Soft Power. In this event they were asked to suggest reforms in the banking sector, insurance and capital markets, and how to bring about the enhancement of skilled workforces in the financial sector and create more youth employability. The objective of these groups was to brainstorm and share their ideas on various topics. The action points had to focus on job creation, income enhancement, technology disruption and ease of doing business and governance and policy. It is widely accepted that economic development cannot be adequately grasped unless the ‘non-economic’ factors are taken into account. The entrepreneurs were encouraged to work towards promoting the social welfare schemes of the Government among their employees. The Prime Minister launched Start Up India scheme alongwith the Stand Up India initiative which is to promote entrepreneurship among the Scheduled Castes, Scheduled Tribes, and Women, by facilitating loans in the range of Rs. 10 Lakhs to Rs. 100 Lakhs. This scheme has will aim to empower the deprived sections of society by providing credit at lower rates. Under this scheme each branch of a scheduled commercial bank should facilitate at least two such loans. As per the government, these are sectors of the population that are often underprivileged or under-served and they have lot of potential to rise and shine in future. This scheme will help them by facilitating loans for non-farm sector entrepreneurship. This initiative will shift the focus towards SC/ST women entrepreneurs to promote them inclusivity. “For further accelerating the growth process as well as realising the vision of Sabka Saath, Sabka Vikaas, it is imperative that the dynamism, resources and innovative spirit of the leaders in private sector is focused towards the emerging opportunities and challenges in the Indian economy,” NITI Aayog CEO Amitabh Kant said in a letter addressed to the shortlisted candidates, as reported by Economic Times.
India’s young entrepreneurs called for the greater involvement of the private sector and more public-private partnerships (PPP) as part of suggestions to prepare a new policy template for the country. More than 200 of them pitched for leveraging the strength of non-state entities to develop India’s soft power, improve education levels and help mitigate climate change.
The Champions Of Change proposed to increase transparency in the education system and enable students to take part in the decision-making process. Making schools ‘for profit’ ventures would improve learning outcomes as incentives go a long way in improving the quality of education. Some entrepreneurs were in favour of creating innovative new boards and national assessments to enable comparison by state linked to funding. The entrepreneurs said there was a need create 20-100 million new jobs through connectivity, accessibility and data usage and in 2022, the country would need value-added manufacturing. To harness India’s soft power, the young entrepreneurs emphasized the need to debunk myths and create brand Handmade India on the lines of Make in India and leverage private brands. Easy to use, world-class, regional-language-based, multimedia content, according to them, can drive financial literacy in India. They suggested the government replace capital subsidies and give tax incentives to enable consumption of green power. To address climate change, they said the private sector can create cost-efficient, carbon and water positive prototypes for smart cities. Similarly, there is a need to create water sources, recycling plants, especially in drought-affected areas.
ABOUT THE POLICY
The important features of the policy includes, single window clearance even with the mobile application, 10,000 crore funds, reduction in patent registration fee, modified and more friendly bankruptcy code to ensure 90- day exit window, freedom from mystifying inspections for 3 years, new schemes to provide IPR protection to start-ups and new firms. This scheme has various benefits such as self-certification and compliance under 9 environmental and labour laws, startup patent application fast track and upto 80% rebate in filing patents, public procurement fast track under the criteria of “prior experience/turnover” for startups in all Central Government ministries/departments, winding up company 90 days under insolvency & Bankruptcy code 2016, INR 10,000 crore fund of funds for investments into startups through Alternate Investments funds, INR 2,000 crore credit guarantee fund for startups through National Credit Guarantee Trust Company/ SIDBI over 4 years, tax exemptions on income tax for 3 and tax exemptions on capital gains & on Investments above Fare Market Value.
The HRD Ministry and department of science and technology have agreed to partner in an initiative to setup over 75 such startup support hubs in National Institute of technology, Indian Institute of Informational Technology, the Indian Institute of Science Education and Research. Under the scheme, a group of start-up will acknowledge an MOU with the prestigious institutions and also will establish startup centers in their college campus.
Requirements for this scheme are as follows:
- A startup up to 7 years and for biotechnology startups upto 10 years from its date of incorporation or registration. Acknowledging the long gestation period for Startups, the definition has been amended and broadened by including scalable business model with high potential of employment or wealth generation and increasing the time of registration from 5 years to 7 years.
- Startups incorporated as either a private limited company or a registered partnership firm or a limited Liability Partnership.
- Startups with turnover for any fiscal year has not exceed INR 25 crore.
- Entity should not have been formed by splitting up or reconstruction a business already in existence.
- Any startup working towards innovation, development or improvement of products or processes or services or if it is a scalable business model with a high potential of employment generation or wealth creation.
This scheme is launched with intention of building a strong eco-system for nurturing innovation and Startups in country and empowering them through better design as well as to accelerate spreading of the Startup movement. This initiative shows government is keen to include young voices of entrepreneurs, startup founders, and CEOs in the policy making process. The entrepreneurs discussed issues such as private sector job creation, income expansion, innovation, government assistance on ease of doing business and policy and development of innovative technology.
(This is submitted by Bharti Singh, a Law Student)